California continues to devastate its economy for a net-zero dream world

• California, the 4^th largest economy in the world, was virtually independent of foreign oil imports in 1973, but due to its relentless regulations to reduce in-state oil production the State now imports more than 70% of its crude oil demand to run the States' 9 International airports, 41 Military airports, and 3 of the largest shipping ports in America.

Over the last several decades, California's passion totransition away from fossil fuels has overregulated and overly burdened just the SUPPLY of oil production and refining, but has not reduced the increasing materialistic DEMANDS of the State for the more than 6,000 products and transportation fuels made from those fossil fuels. Thus, China is savoring the future with their many refineries coming online to meet the DEMANDS of California.

Just last year, in October 2024, Phillips 66 announced that it would close its Wilmington-area refining complex this year, which will further reduce the state's gasoline, diesel, and aviation fuels production capacity, wiping out more than 8% of the state's crude oil processing capacity. Losing another 1.3 billion gallons in annual gasoline output will only worsen the state's supply challenges to meet the demands.

The recent announcement that the Valero Benica Refinery in Northern California will be closing by the end of 2026 was disappointing, but shockingly, a prelude to more closures in the future. The Valero refinery at Benicia represents almost 9% of the state's crude oil processing capacity to meet the materialistic demands of the state's residents.

• California refineries cannot simply increase production to offset the loss from closures, such as the Phillips 66 Wilmington and upcoming Valero Benicia shutdowns, due to a combination of physical, regulatory, and economic constraints. First, most California refineries already operate near their maximum capacity utilization, typically averaging between 85% and 95%, leaving little room for scalable increases without risking operational reliability. Increasing throughput would require significant capital investments in equipment upgrades, hiring, and maintenance capacity-none of which are viable in a state that is actively discouraging fossil fuel infrastructure through aggressive decarbonization mandates.
• Second, the California regulatory environment imposes some of the strictest environmental and operational requirements in the world. Any significant increase in refinery output would likely trigger new reviews under the California Environmental Quality Act (CEQA), potentially leading to years-long permitting delays. Additionally, CARB's requirements for specialized gasoline formulations (CARBOB) mean refineries cannot simply increase production using generic refining methods; instead, they must produce complex, seasonal, and cleaner-burning fuel blends, which require dedicated infrastructure and limit flexibility.

Economically, refiners face a shrinking return on investment. With the 2035 ban on new internal combustion vehicles looming and EV adoption slowly rising, California refiners have little long-term incentive to invest in expanding production. In fact, many are choosing to exit the market or repurpose facilities for renewable fuels rather than double down on gasoline. As a result, the remaining refiners are unlikely or unable to ramp up production to backfill lost supply, leaving California more reliant on imported, California-compliant gasoline from out-of-state or foreign sources, which is slower and more expensive to procure.

Governor Newsom's policies, just on the "supply" side of the equation, continue to force California, the 4^th largest economy in the world, to be the only state in contiguous America that imports most of its crudeoil demands from foreign countries. California crude oil production is in terminal decline, driven by the lack of drilling permits,despite ample reserves. That dependence on foreign imports hasincreased imported crude oil from foreign countries from 5 percent in 1992 to more than 70 percent today of total consumption demand.

A Prager University 5-minute video on the World Without Fossil Fuels provides visual explanations about the demands of the American economy, which will lead to importing manufactured fuels and petrochemicals from new Asian refineries in the coming years, which may soon become a reality, with China coming to the rescue!

In the more immediate term, China has plans for multiple new refineries, with at least five projects expected to be completed by 2028, and another three new refineries by 2030, contributing to a broader shift towards integrated petrochemical facilities.

Asia is the region with the greatest number of future petroleum refineries. As of 2021, there were 88 new refinery facilities in planning or under construction in Asia for manufactured gasoline, diesel, and aviation fuels used by every transportation infrastructure, and the military, as well as the manufactured oil derivatives that are the basis of most products being used by mankind.

Not only does California's la-la land have a minuscule impact on worldwide emissions, but its growing dependence on refineries in China to meet the enormous demand for transportation fuels to support the state's public and military airports is becoming a national security risk to the entire United States of America.